17 Jun 2010

Punishment for failure to compensate: Supreme Court

Declaring that accused can be imprisoned for failure to pay compensation directed by a court, the Supreme Court in a recent declaration set to terms the law to the effect that an accused was duty bound to pay compensation when so directed and for the failure to compensate he could be imprisoned or made liable to pay a fine. 

Reversing a decision of the Kerala High Court, the Supreme Court declare the law in the following terms;

21) Moving over to the question, whether a default sentence can be imposed on default of payment of compensation, this court in the case of Hari Singh v. Sukhbir Singh and in Balraj v. State of U.P, has held that it was open to all courts in India to impose a sentence on default of payment of compensation under sub-section (3) of Section 357. In Hari Singh v. Sukhbir Singh (supra), this court has noticed certain factors which requires to be taken into consideration while passing an order under the section:-

“11. The payment by way of compensation must, however, be reasonable. What is reasonable, may depend upon the facts and circumstances of each case. The quantum of compensation may be determined by taking into account the nature of crime, the justness of claim by the victim and the ability of accused to pay. If there are more than one accused they may be asked to pay in equal terms unless their capacity to pay varies considerably. The payment may also vary depending upon the acts of each accused. Reasonable period for payment of compensation, if necessary by instalments, may also be given. The Court may enforce the order by imposing sentence in default.”
22) This position also finds support in the case of R v. Oliver John Huish; [1985] 7 Cr. App. R.(S.) 272. The Lord Justice Croom – Johnson speaking for the Bench has observed:
“When compensation orders may possibly be made the most careful examination is required. Documents should be obtained and evidence either on affidavit or orally should be given. The proceedings should, if necessary, be adjourned, in order to arrive at the true state of the defendant’s affairs. Very often a compensation order is made and a very light sentence of imprisonment is imposed, because the court recognizes that if the defendant is to have an opportunity of paying the compensation he must be enabled to earn the money with which to do so. The result is therefore an extremely light sentence of imprisonment. If the compensation order turns out to be virtually worthless, the defendant has got off with a very light sentence of imprisonment as well as no order of compensation. In other words, generally speaking, he has got off with everything.”
23) The law laid down in Hari Singh v. Sukhbir Singh (supra) was reiterated by this court in the case of Suganthi Suresh Kumar v. Jagdeeshan, [(2002) 2 SCC 420]. The court observed:-
“5. In the said decision this Court reminded all concerned that it is well to remember the emphasis laid on the need for making liberal use of Section 357(3) of the Code. This was observed by reference to a decision of this Court in 1989 Cri LJ 116 Hari Singh Vs. Sukhbir Singh. In the said decision this Court held as follows:-
“The quantum of compensation may be determined by taking into account the nature of crime, the justness of the claim by the victim and the ability of accused to pay. If there are more than one accused they may be asked to pay in equal terms unless their capacity to pay varies considerably. The payment may also vary depending upon the acts of each accused. Reasonable period for payment of compensation, if necessary by instalments, may also be given. The court may enforce the order by imposing sentence in default.”
“10. That apart, Section 431 of the Code has only prescribed that any money (other than fine) payable by virtue of an order made under the Code shall be recoverable "as if it were a fine". Two modes of recovery of the fine have been indicated in Section 421(1) of the Code. The proviso to the Sub-section says that if the sentence directs that in default of payment of the fine, the offender shall be imprisoned, and if such offender has undergone the whole of such imprisonment in default, no court shall issue such warrant for levy of the amount.”
The court further held:-
“11. When this Court pronounced in Hari Singh v. Sukhbir Singh (supra) that a court may enforce an order to pay compensation "by imposing a sentence in default" it is open to all courts in India to follow the said course. The said legal position would continue to hold good until it is overruled by a larger bench of this court. Hence learned single judge of High Court of Kerala has committed an impropriety by expressing that the said legal direction of this Court should not be followed by the subordinate courts in Kerala. We express our disapproval of the course adopted by the said judge in Rajendran v. Jose 2001 (3) KLT 431. It is unfortunate that when the Sessions judge has correctly done a course in accordance with the discipline the Single judge of the High Court has incorrectly reversed it.”
24) In order to set at rest the divergent opinion expressed in Kunhappu’s case (supra), this Court in the case of Vijayan v. Sadanandan K. and Anr., [(2009) 6 SCC 652], after noticing the provision of Section 421 and 431 of Cr.PC, which dealt with mode of recovery of fine and Section 64 of IPC, which empowered the courts to provide for a sentence of imprisonment on default of payment of fine, the Court stated:
“17. We have carefully considered the submissions made on behalf of the respective parties. Since a decision on the question raised in this petition is still in a nebulous state, there appear to be two views as to whether a default sentence on imprisonment can be imposed in cases where compensation is awarded to the complainant under Section 357(3) Cr.P.C. As pointed out by Mr. Basant in Dilip S. Dahanukar's case, the distinction between a fine and compensation as understood under Section 357(1)(b) and Section 357(3) Cr.P.C. had been explained, but the question as to whether a default sentence clause could be made in respect of compensation payable under Section 357(3) Cr.P.C, which is central to the decision in this case, had not been considered.” 
The court further held:-
“22. The provisions of Sections 357(3) and 431 Cr.P.C., when read with Section 64 IPC, empower the Court, while making an order for payment of compensation, to also include a default sentence in case of non-payment of the same. The observations made by this Court in Hari Singh's case (supra) are as important today as they were when they were made and if, as submitted by Dr. Pillay, recourse can only be had to Section 421 Cr.P.C. for enforcing the same, the very object of Sub-section (3) of Section 357 would be frustrated and the relief contemplated therein would be rendered somewhat illusory.”
25) In Shantilal v. State of M.P., [(2007) 11 SCC 243], it is stated, that, the sentence of imprisonment for default in payment of a fine or compensation is different from a normal sentence of imprisonment. The court also delved into the factors to be taken into consideration while passing an order under Section 357(3) of the Cr.PC. This court stated:-
“The term of imprisonment in default of payment of fine is not a sentence. It is a penalty which a person incurs on account of non-payment of fine. The sentence is something which an offender must undergo unless it is set aside or remitted in part or in whole either in appeal or in revision or in other appropriate judicial proceedings or “otherwise”. A term of imprisonment ordered in default of payment of fine stands on a different footing. A person is required to undergo imprisonment either because he is unable to pay the amount of fine or refuses to pay such amount. He, therefore, can always avoid to undergo imprisonment in default of payment of fine by paying such amount. It is, therefore, not only the power, but the duty of the court to keep in view the nature of offence, circumstances under which it was committed, the position of the offender and other relevant considerations before ordering the offender to suffer imprisonment in default of payment of fine.”
26) In Kuldip Kaur v. Surinder Singh and anr. (AIR 1989 SC 232), in the context of Section 125 Cr.PC observed that sentencing a person to jail is sometimes a mode of enforcement. In this regard the court stated:-
“6. A distinction has to be drawn between a mode of enforcing recovery on the one hand and effecting actual recovery of the amount of monthly allowance which has fallen in arrears on the other. Sentencing a person to jail is a 'mode of enforcement'. It is not a 'mode of satisfaction' of the liability. The liability can be satisfied only by making actual payment of the arrears. The whole purpose of sending to jail is to oblige a person liable to pay the monthly allowance who refuses to comply with the order without sufficient cause, to obey the order and to make the payment. The purpose of sending him to jail is not to wipe out the liability which he has refused to discharge. Be it also realised that a person ordered to pay monthly allowance can be sent to jail only if he fails to pay monthly allowance 'without sufficient cause' to comply with the order. It would indeed be strange to hold that a person who 'without reasonable cause' refuses to comply with the order of the Court to maintain his neglected wife or child would be absolved of his liability merely because he prefers to go to jail. A sentence of jail is no substitute for the recovery of the amount of monthly allowance which has fallen in arrears.”
27) From the above line of cases, it becomes very clear, that, a sentence of imprisonment can be granted for default in payment of compensation awarded under Section 357(3) of Cr.PC. The whole purpose of the provision is to accommodate the interests of the victims in the criminal justice system. Sometimes the situation becomes such that there is no purpose is served by keeping a person behind bars. Instead directing the accused to pay an amount of compensation to the victim or affected party can ensure delivery of total justice. Therefore, this grant of compensation is sometimes in lieu of sending a person behind bars or in addition to a very light sentence of imprisonment. Hence on default of payment of this compensation, there must be a just recourse. Not imposing a sentence of imprisonment would mean allowing the accused to get away without paying the compensation and imposing another fine would be impractical as it would mean imposing a fine upon another fine and therefore would not ensure proper enforcement of the order of compensation. While passing an order under Section 357(3), it is imperative for the courts to look at the ability and the capacity of the accused to pay the same amount as has been laid down by the cases above, otherwise the very purpose of granting an order of compensation would stand defeated.


29) Section 431 clearly provides that an order of compensation under Section 357 (3) will be recoverable in the same way as if it were a fine. Section 421 further provides the mode of recovery of a fine and the section clearly provides that a person can be imprisoned for non-payment of fine. Therefore, going by the provisions of the code, the intention of the legislature is clearly to ensure that mode of recovery of a fine and compensation is on the same footing. In light of the aforesaid reasoning, the contention of the accused that there can be no sentence of imprisonment for default in payment of compensation under Section 357 (3) should fail.
30) A similar position is also prevalent in other countries. In the United Kingdom, Section 82 (3) of Magistrates’ Courts Act, 1980 allows for a sentence of imprisonment for default in payment of a fine or any financial order. The Section reads:-
“Where on the occasion of the offender’s conviction a magistrates’ court does not issue a warrant of commitment for a default in paying any such sum as aforesaid or fix a term of imprisonment under the said Section 77(2) which is to be served by him in the event of any such default, it shall not thereafter issue a warrant of commitment for any such default or for want of sufficient distress to satisfy such a sum unless:-
(a) he is already serving a sentence of custody for life, or a term of imprisonment, detention in a young offender institution, or detention under Section 9 of the Criminal Justice Act, 1982; or
(b) the court has since the conviction inquired into his means in his presence on at least one occasion.”
31) In Australia, under Section 4 of the Sentencing Act, 1997 the definition of “fine” includes a compensation order. Procedure for enforcement of fines is provided for in Section 47(7) of the Act and provides for a sentence of imprisonment or default in payment of fine.

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